The news: Amazon is under pressure from German antitrust regulators to change its pricing mechanisms after an investigation found that they may violate both domestic and EU laws.

The allegations: A preliminary assessment from Germany’s Federal Cartel Office found that Amazon’s price controls, which allow it to dictate how much sellers can charge for their products, run counter to competition laws.

• Sellers that price products too high can have their offers removed or be pushed out of the important buy box by Amazon’s algorithm.
• Those products can also be demoted in Amazon’s search results or excluded from advertising.
• “Competition in the online retail business in Germany is largely determined by Amazon’s rules for the platform,” Andreas Mundt, president of the Federal Cartel Office, said in a statement. “Since Amazon competes directly with other retailers on its platform, influencing competitors’ pricing, including caps, is generally questionable from a competition perspective.”

Our take: The German regulator’s findings are not unique: Both the EU and the US Federal Trade Commission have cited the retailer’s opaque pricing algorithm as an antitrust concern. But despite consistent regulatory pressure, Amazon remains insistent that its strict pricing rules are necessary in order to guarantee a positive shopping experience and provide value, and that any changes would harm both customers and sellers.

While Amazon has some time to respond to the Federal Cartel Office’s charges, the current regulatory—and geopolitical—environment is unlikely to be favorable to its arguments, especially since it has already made concessions to the EU over its buy box practices and use of seller data.

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